Yahoo-Microsoft Retrospect: Refusal Cost Yahoo Shareholders $24.4B USD

From DailyTech: Microsoft made the biggest news of the young year in February 2008, when it made a $44.6B USD bid for Yahoo Inc. The acquisition of the struggling internet search firm would have created a major competitor to Google.

However, Yahoo's leadership, unwilling to loosen their grip on their control of the company, turned down Microsoft's offer of approximately $31/share, demanding close to $40/share or no deal.

At the time Yahoo claimed Microsoft's deal undervalued Yahoo's worth. Now, with Microsoft gone and its potential partnership with Google unexpectedly gone, Yahoo is probably wishing it had accepted Microsoft’s offer.

The magic number to consider when pondering Yahoo's fate is 291. That is the approximate percentage in Yahoo's current worth that the deal would have given Yahoo. A 191 percent premium over the current price is certainly more than it could hope for now.

The original deal was to be half cash, half stock -- approximately $22.3B USD in cash and $22.3B in stock. The cash alone is almost double Yahoo's current worth. At $10.80/share during trading Wednesday, Yahoo's net worth was approximately $12.69B USD. And though the Microsoft stock has also devalued, dropping the value of the stock portion from $22.3B USD to $14.63B USD, approximately, this would be a handsome addition.

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